Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 108.484 | EURUSD 1.1125 | AUDUSD 0.68556 | NZDUSD 0.64148 | USDCAD 1.30932 | USDCHF 0.98957 | GBPUSD 1.28722 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD               1.11312 | 1.1116

USDJPY                108.507 | 108.253

GBPUSD              1.28991 | 1.28426

USDCHF               0.98997 | 0.98901

AUDUSD             0.68623 | 0.68342

USDCAD              1.31091 | 1.30914

NZDUSD              0.64128 | 0.63865

EURCHF               1.10097 | 1.10025

EURGBP              0.86581 | 0.86314

EURJPY                120.777 | 120.393

For Today

• GBP: Opening around the 1.2875 area the market made steady headway back to the 1.2900 area before running into the Tokyo opening then the market turned into a steady stream of selling with the market slowly slipping through the 1.2850 levels as uncertainty starts to reappear in the market, Topside offers light through the 1.2950 area however the closer you get to the 1.3000 area the stronger the offers begin to get, with stop losses likely on a push through the 1.3020 levels could see option related stops and the market quickly moving through to challenge the 1.3050 sentimental level and very little to slow a push higher especially on the back of any hopeful news, downside bids likely to be limited through the 1.2800 levels and with maybe weak stops on a dip through the 1.2750 areas the market could possibly see quick dips through to the light congestion around the sentimental levels to 1.2600 where possibly stiffer bids start to appear.
• JPY: Opening just short of the 108.50 level and weakly tested through the level into the Tokyo session before quickly dropping back to test through to the 108.25 area before finding some support and a limited bounce before basing along the 108.30 areas through to the grey hour, Topside offers into the 109.00 level with limited resistance to a slight move through the level with increased offers likely to appear in the 109.20-40 areas before weak stops appear and opens the market to increasing congestion on any push through the 109.50 levels and increasing further on any push to the 110.00 level. Downside bids light back through the 108.00 areas with weak stops likely on a dip through the 107.80 area and congestion likely through the 107.50 level and continuing into growing bids in the 107.00 areas.
• AUD: Moving from the 0.6855 areas testing lightly through the 0.6860 area and ranging between the two levels through to Tokyo fixing where JPY strength appeared and forced the Oz back lower also coinciding with general IMF calls on Asian growth, the Oz dipped back through to the 0.6835 areas before finding some bids and holding through to the grey hour unable to push to far through the 0.6840 level, Downside bids light through the 68 cents level with weak stops likely on a dip through the 0.6780 level and opening the market to a limited move initially but renewing the downside potential through to the 0.6680-0.6700 level with weak stops likely on a dip through the 0.6670 level with congestive bids then likely to be patchy but centred around the sentimental 50/00 areas, topside faces stronger selling again above the 0.6880 level and a bit away from the current levels if ranges have anything to say on the matter, a push through the 69 cents level doesn’t really do much until pushing past the 0.6920 area and congestion quickly following in to limit any gains.
• EUR: As with the Cable initially finding some light buying from the opening around the 1.1125 areas but unable to clearly clear the 1.1130 area for the move into Tokyo and then facing a slow decline through the session with a limited test through the 1.1120 level as with yesterdays lows, Topside offers increasing on a push through to the 1.1170 area and into the 1.1200 area with congestion likely through the level to cancel out any weak stops and opening up a further steady climb into the 1.1240 areas, Downside bids light through to the 1.1080 level where weak stops are likely to appear however, once cleared 1.1060 level sees minor congestion through to 1.1040 before the market starts to become more supportive on any dips towards the 1.1000 levels.

Overnight News

USD:

US approves duties on Aluminium wire, Cable imports from China BBG

API Reports US crude stockpiles rose 4.45m BBL last week BBG

Democrats say they have game changer on impeachment (again) The Hill

GBP:

GBP May fall 1.15$ if there is a hard Brexit – BBG

UK Official: Brexit delay until Jan 31 means election

UK Official only way country can move on is with election

Government win second reading of Brexit deal

EUR/GBP:

France says Brexit extension to gain time must be excluded BBG

France: Brexit deal must be implemented without delay BBG

France: Extensions to discuss Brexit accord must be excluded BBG

France: Open to a few days technical Brexit extensions BBG

EU will grant Brexit extension to give MP’s more time and avoid no deal – TEL

EUR:

Germany proposes Schnabel as ECB Board Member BBG

USD/CNY:

US-China rivalry to outlast any trade deal SMP

CNY/HKD:

Beijing draws up plan to replace Hong Kong’s Carrie Lam FT

IMF:

IMF cuts Asia growth forecasts for 2019 and 2020

Today’s Data

Actual A | Consensus C | Previous P | Revised R | all timings GMT/UTC

NZD       Trade Balance (SEP) A -1242m | C -1375m | P -1565m

NZD       Trade Balance 12mth YTD (SEP) A -5.21b | C -5254m | P -5484m

1200       USD       MBA Mortgage Applications P 0.5%

1400       USD       House Price Index MoM (AUG) C 0.4% | P 0.4%

1500       EUR        Eurozone Consumer Confidence C -6.7% | P -6.5

1530       USD       DOE US Crude Oil Inventories (OCT 18) P 9281k

2300       AUD       CBA PMI Composite P 52.0

2300       AUD       CBA PMI Manufacturing (OCT P) P 50.3

2300       AUD       CBA PMI Services P 52.4

Harry Hindsight

 

• GBP: A slow rise through the Asian session with the market opening around the 1.2965 level and testing through to the grey hour pushing lightly above the 1.2985 area in limited trading for GBP, moving into early morning saw the market drifting quickly off into the London session and the release of stronger government borrowing saw the market dipping quickly through to the 1.2920 level before holding for several hours in a limited range before testing back to the opening level and then moving into the NYK session with a similar selling move as the London opening and the market lightly testing through the 1.2900 level before rallying late in the London session before rising quickly again to test towards the 1.300 level and dropping far quicker off through to the 1.2860 and triggering weak longs out before holding the level on a couple of tests through to the close.
• JPY: Light trading into the Tokyo session with a small move higher on the Tokyo fix saw the high for the day set just above the 108.70 level before dipping back to the opening 108.60 level and holding through to Tokyo lunch before starting a slow drift through the London opening to push at the 108.50 level with several attempts through to the London close before NYK finally took it through to a quiet range between the 108.45-50.
• AUD: A little choppy but generally holding in a limited range through the day, opening around the 0.6865 areas and holding quietly in the area through to the Tokyo session before steadily pushing over a few hours to the high of the day in line with the movement in USDJPY testing through to the 0.6882 area before dropping back quickly through to the opening level again, the market again started a steady rise penetrating the 0.6880 level as it moved through the grey hours however, like the first rally as soon as through that level it dropped quickly back and the added pressure in early London saw the market testing the 0.6860 level and holding through to just before NYK before starting a move lower and NYK opening walking in to send it to its lows just above the 0.6850 area then as with Asia a slow rise to just above the opening the market then dropped back quickly just after the London opening and then ranging in the 0.6850-60 area through to the close.
• EUR: A quiet Asian session with the market moving off early lows just above the 1.1145 level and testing gradually through to just above the 1.1155 level and although testing the level several times into the early London session the market failed to push beyond the level and dropped back steadily through London opening to test to the 1.1135 level and ranging weakly between the low and 1.1145 until NYK stepped in and dropped back in steps through towards the 1.1120 areas before becoming a little chopping on a move back to above the opening levels on the close of London and then again making a stab towards the highs a couple of hours late before dropping quickly back from the level to test to new lows into high 1.11teens before bouncing and then holding around the 1.1130 level to the close.

 

Yesterday’s Premiership results

EUR        ECB Publishes Bank Lending Survey

GBP       Central Government NCR (SEP) A 14.8B | P 5.7b

GBP       PSNB Ex Banking Groups (SEP) A 9.4b | C 9.7b | P 5.8b

GBP       Public Finances (SEP) A2.65b | P 6.38b

GBP       Public Sector Net Borrowing (SEP) A 14.8b | C 8.9b | P 5.6b

CAD       Retail Sales MoM (AUG) A -0.1% | C 0.5% | P 0.6%

USD       Existing Home Sales MoM (SEP) A -2.2% | C -0.7% | P 1.5%

GBP       UK Parliament Second reading vote on Brexit Bill

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